Surplus In Copper Is Beginning To Grow Higher On Monthly Basis

Copper......

The much awaited and problematic world Copper surplus situation has started growing as per the latest update by International Copper Study Group (ICSG). The group monthly release showed that the Copper markets were in production surplus of 170000 tonnes in the month of December 2012. The production surplus for November 2012 was 30000 tonnes. The major reason given was the lower usage in major consuming regions of Copper.

Meanwhile, another worry is the stupendous rise of LME Copper inventories that has reached a 10 year high in London Metal Exchange. LME Copper inventories increased by 6625 tonnes on Thursday to reach 557450 tonne, their highest level since October 2003. The rise of LME inventories is worrying traders and can put pressure on a mild recovery in prices seen over last three days.
ICSG said that for the full year ended 2012, Copper markets was in deficit of 340000 tonnes. The constraint in refined Copper production was the reason behind rise of Copper deficit in 2012. In China, apparent usage increased in 2012 but the group has mentioned that unreported inventories in bonded warehouses in China are rising significantly higher.
World refined copper production of Copper was 20.13 million tonnes, up 2.5% in 2012 compared to 19.65 million tonnes in 2011. China showed a 11% rise in Copper production. Japan registered a rise of 14% in the Copper production after recuperating from tsunami and earthquake. Production declines were noted in Chile to the tune of 6%, while production in US declined by 3% while in Philippines the production declined by 45%.
World refined Copper usage was 20.47 million tonnes in 2012, up 3.1% compared to 2011. World usage declined by 2.2% excluding China. However, apparent usage in China grew by 11%. Net imports of China grew by 17% in 2012. Usage increased by 7.5% in Asia and an increase of 1% in America was noted.
World mine production grew by 16.74 million tonnes in 2012, from 16.02 million tonnes in 2011. In 2012, concentrate production increased by 4.2% while solvent extraction-electrowinning (SX-EW) production was up by 5.4%. Increases in Chile was 3% while in China it was 26%, Democratic Republic of Congo (DRC) (21%), Mexico (18%) and Peru (5%) more than offset declines in Australia (4%) and Indonesia (26%).
MCX Copper closed the last session at Rs 416.3 per kg, down 0.2%. The prices tested a high of Rs 419.9 per kg and a low of Rs 414 per kg. The most active Copper contract has resistance at Rs 422 per kg. Supports for Copper are at Rs 412 and 410 per kg. LME Copper three month forwards closed at $ 7626 per tonne, up $ 18 per tonne
Source by Commodity Insights